Levy tackles council debt

The Wanganui District Council's new debt repayment levy increases rates 1.4 per cent but will reduce the community's debt over time, finance manager Julian Harkness says.

But Mowhanau resident John Carson isn't reassured. He said his rates bill was nearly $3000, with nearly $500 for interest alone, and it would take years to pay back council debt at that rate.

The council will be paying just over $7 million in interest on its debt this year - 16 per cent of total rate returns.

That means that about $325 from the average household rates bill of $2031 will go on interest alone. Mr Harkness said the council's debt stood at $88.5 million on August 31, and is set to go up this year with new borrowing of nearly $5 million.

It will be partly offset by debt repayments of $1.7 million. The net result is an increase to debt of just over $3 million.

The council's debt is predicted to peak at $119 million in the 2015/16 financial year.

After much discussion, councillors imposed a new levy for debt repayment this year, increasing the rates take 1.4 per cent. Mr Carson, who lives at Mowhanau, has written several letters to the Chronicle on the subject of council debt.

He has a pension and a little bit more to live on. He said he was eating into reserves to pay his rates bill of nearly $3000.

"We are virtually living beyond our means."

He noted local government finance and policy analyst Larry Mitchell had ranked the Wanganui council lowest in the country for financial sustainability.